TrueNorth

Gold Starship: Family Reunion On Pluto?

Latest missive from Stewart Thomson

I love this guy.

1. Ladies and gentlemen, we have liftoff. The gold bullion rocket has taken off. I warned those standing under the gold rocket trying to pick the next $50 move in gold, they would be vaporized. A huge contest in the gold community emerged to see who could totally ignore the Michaelangelic head and shoulders pattern, while making the greatest prediction on how low gold would go. 1000, 980, 950 were all popular predictions of the micro men. Many went short, with a genius play to make money on the way to their imaginary targets.

 

2. Do you really think people so focused on gold's decline really owned gold themselves? No. They blew out their core positions to play 'gold hamburger flipper.' The burger landed on the floor and the banksters just stomped on it. The flippers are dead.

 

3. As I write this at 4am, gold has surged to almost 1100, and the gold top callers are nothing but a pile of charcoal, buried with their systems, micro charts, and golden tiddly wink forecasting kits. They've been calling the top from 905! That's almost $200 of total failure.

 

4. This is the OTC derivatives show (OTCDs). Not the coming mine supply show. Not the gold jewellery show. Not "the govt is too big show," And certainly not "the top is in because some idiot sold a thousand bucks of 10 carat gold plated jewellery in a hotel room to a glorified pawn shop broker."

 

5. The big picture of the gold market is the deflation (to zero for a lot of it) of a thousand trillion dollars of OTCDs and gold's response to the central bank "solution" of devaluing the currency so the toilet paper OTCDs can be marked to something resembling market.

 

6. Soon the emails will start. They will want to get in on gold. Questions like, "what's happening, gold looks pretty good, right, Stewart?" Where were these people at 680? At 905? Others that sold out will ask, "But why is gold rising, I don't understand?"

 

7. This is the gold rapture. No prisoners will be taken. If you are a long term investor, the strategy now is to sit there in the corner and wait. Wait for much higher prices before selling anything. You need to decide who you are, where you sit on the investor-trader scale. Investors want to become traders on severe price weakness, and traders want to become investors into great strength like we have now. If you are a trader, selling now is as hard as buying at 905 and 680 was. It has to be done if you want to act professionally. You are selling into a price strength surge that feels like it will never end.

etc continued here on 321gold.

Yet, price unchanged in GBP. Still £660.

[All] Alan weighs in on gold:

http://allallan.blogspot.com/2009/11/gold.html

The above Daily chart of GLD provides some precautionary hints against jumping on the Gold bandwagon right now. The software is counting 5 waves up along with a divergence on the Elliott Oscillator (annotated above). In addition, the False Bar Stochastic is just a few days away from a Sell Signal setup.

 

On the other hand, the only argument left is the only one that really matters, GLD is clearly in an uptrend. Bullish on Gold, but on guard for a change-in-trend.

Well-spotted Diet Cola Additct. I looked up the price of an old sony phone i have here and for the two quid they offered, I couldn't be bothered to "recycle" it.

Speaking of the price of gold, it's still not up to much in GBP. Only around £660, which we saw in February, and again a few weeks back.

This article courtesy of GATA:

Cash for Gold? Are you kidding?

http://www.swissamerica.com/article.php?ar...0910200425f.txt

Provides a good overview of the key issues about gold vs paper. Would be a good thing to send to a friend or family member to give them a new perspective.

Jeepers, gold's caught another bid this morning, 1091 and climbing!

What? It looks like it's made of Lego!

I've been wondering what it is too, as you note, the timing is strange.

Citigroup going south?

So, given today's action, can we add "the Indian put" to "the Chinese put" vis a vis gold?

jeepers, it's gone vertical! and so has silver!

1070 against a rising dollar. This is interesting.

Very interesting Pixel8r. I reckon you are right, that the miners and silver are cheap these days, relatively speaking. I plan to buy more of both after the next crash.

Im supprised that the Indian central bank buys 200 tons off MFI when they could have bought it from the comex.

Perhaps they weren't certain COMEX could meet delivery obligations in bullion.

So, 7000 is the new 6000?

Cheers Pixel8r.

edited to add: Gold's also up about £10 from Friday's close.

Pound weakness as well?

Gold's up 11 bucks this morning. Que pasa?

Thanks, that's a handy guide.

I'm hoping that this winter gold stocks get beaten into the ground but that gold holds up much better.

 

If so I can sell some gold next spring to get more gold stocks, as they would be relatively cheaper.

I am planning on buying gold miners and a few silver stocks in the next crash. I would have done in last year's crash but couldn't get an online account, and didn't want to pay huge commissions to buy Canadian stocks from the UK.

I'll also buy more silver.

Thanks very much Pixel8r.

Anybody got a chart of the gold:silver ratio? Bob Hoye just said it's at 64!

Silver £9.86 at goldmoney. It's on sale!

Awesome!

How to play the Gold: Silver Ratio

Article here from Hard Assets Investor

Playing The Gold/Silver Ratio

 

Investors looking to play the continuing collapse have several options available.

 

Some die-hard precious metals aficionados approach the ratio literally, managing physical stores of the two metals based on ratio targets. This is a strategy for those who are fortifying their bunkers, preparing for the end of the financial system as we know it and the subsequent return of the gold standard.

 

Under this strategy, the ultimate goal is simply to increase the number of ounces of gold held, without any real regard for price. For example, let's say the gold/silver ratio is currently at 60, but I think it's going to 30. I can then sell one ounce of gold for 60 ounces of silver, and when the ratio hits 30, I can use my 60 ounces of silver to buy two ounces of gold. Voila! I have doubled my physical gold holdings.

 

Of course, if the ratio goes to 120 instead, my 60 ounces of silver only buy me half as much gold as I'd originally held. In some ways, this style of trading feels a bit like playing the child whose older brother convinced him to trade his quarter for two dimes.

Sell gold or hold till February

 

Either way investors in an enviable position

 

What to do Investors holding gold bullion are in an enviable position. Should they take profits during the current period of seasonal strength that started in July or should they wait until the end of the next period of seasonal strength from the end of November to the beginning of February?

 

Holding between now and the end of November implies downside risk of about 10%. On the other hand, holding until next February offers intriguing upside potential. Investors will make the decision this week based on their personal investment circumstances and ability to take risk.

 

http://www.financialpost.com/story.html?id=2139502

 

"intriguing upside potential" = new term for "financial salvation"